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Equity-Based Compensation
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement, Disclosure [Abstract]  
Equity-Based Compensation Equity-Based Compensation
Equity-based compensation expense, which is recorded in Selling and administrative expenses in the Consolidated Statements of Operations was as follows:
Year Ended December 31,
202020192018
Equity-based compensation expense$42.5 $48.5 $40.7 
Income tax benefit(1)
(7.7)(9.8)(9.9)
Equity-based compensation expense, net of tax$34.8 $38.7 $30.8 
(1)Represents equity-based compensation tax expense at the statutory tax rates. Excess tax benefits associated with equity awards are excluded from this disclosure and separately disclosed in Note 11 (Income Taxes).
The total unrecognized compensation cost related to non-vested awards was $43 million as of December 31, 2020 and is expected to be recognized over a weighted-average period of 2.0 years.
2013 Long-Term Incentive Plan
The 2013 Long-Term Incentive Plan ("2013 LTIP") provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock and performance awards. The maximum aggregate number of shares that may be issued under the 2013 LTIP is 15.5 million shares of the Company's common stock, in addition to the 3.8 million shares of restricted stock granted in exchange for unvested Class B Common Units in connection with the Company's Initial Public Offering ("IPO"). As of December 31, 2020, 2.6 million shares were available for issuance under the 2013 LTIP, which was approved by the Company's pre-IPO shareholders. Authorized but unissued shares are reserved for issuance in connection with equity-based awards.
Stock Options
The exercise price of a stock option granted is equal to the fair value of the underlying stock on the date of the grant. Stock options have a contractual term of ten years and generally vest ratably over three years. To estimate the fair value of options granted, the Company uses the Black-Scholes option pricing model. The weighted-average assumptions used to value the stock options granted were as follows:
Year Ended December 31,
202020192018
Grant date fair value$20.46 $19.26 $14.80 
Volatility (1)
25.50 %20.00 %20.00 %
Risk-free rate (2)
0.51 %2.53 %2.75 %
Expected dividend yield1.52 %1.23 %1.14 %
Expected term (in years) (3)
6.06.06.0
(1)Based upon an assessment of the two-year and five-year historical and implied volatility for the Company's selected peer group, adjusted for the Company's leverage.
(2)Based on a composite US Treasury rate.
(3)Calculated using the simplified method, which defines the expected term as the average of the option's contractual term and the option's weighted-average vesting period. The Company utilizes this method as it has limited historical stock option data that is sufficient to derive a reasonable estimate of the expected stock option term.
Stock option activity for the year ended December 31, 2020 was as follows:
OptionsNumber of OptionsWeighted-Average Exercise PriceWeighted-Average Remaining Contractual Term (years)Aggregate Intrinsic Value
Outstanding at January 1, 2020
4,138,242 $59.39 
Granted991,431 100.80 
Forfeited/Expired(44,409)92.54 
Exercised(1)
(1,119,812)44.05 
Outstanding at December 31, 2020
3,965,452 $73.71 6.48$230.3 
Vested and exercisable at December 31, 2020
2,192,951 $56.63 4.98$164.8 
Expected to vest after December 31, 2020
1,745,547 $94.70 8.32$64.7 
(1)The total intrinsic value of stock options exercised during the years ended December 31, 2020, 2019 and 2018 was $94 million, $83 million and $47 million, respectively.
Restricted Stock Units ("RSUs")
Restricted stock units represent the right to receive unrestricted shares of the Company's stock at the time of vesting. RSUs generally cliff-vest at the end of three years. The fair value of RSUs is equal to the closing price of the Company's common stock on date of grant.
RSU activity for the year ended December 31, 2020 was as follows:
Number of UnitsWeighted-Average Grant-Date Fair Value
Non-vested at January 1, 2020
209,378 $75.56 
Granted (1)
66,685 112.55 
Vested (2)
(172,691)68.78 
Forfeited(10,936)86.16 
Non-vested at December 31, 2020
92,436 $107.88 
(1)The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2020, 2019 and 2018 was $112.55, $103.24 and $73.95, respectively.
(2)The aggregate fair value of RSUs that vested during the years ended December 31, 2020, 2019 and 2018 was $12 million, $4 million and $2 million, respectively.
Performance Share Units ("PSUs")
Performance share units represent the right to receive unrestricted shares of the Company's stock at the time of vesting. PSUs are granted under the 2013 LTIP which cliff-vest at the end of three years. The percentage of PSUs that shall vest will range from 0% to 200% of the number of PSUs granted based on the Company's performance against a cumulative adjusted free cash flow measure and cumulative non-GAAP net income per diluted share measure over a three-year performance period.
PSU activity for the year ended December 31, 2020 was as follows:
Number of UnitsWeighted-Average Grant-Date Fair Value
Non-vested at January 1, 2020
381,905 $87.78 
Granted (1)
253,307 102.96 
Attainment Adjustment (2)
166,574 59.00 
Vested (3)
(353,245)68.07 
Forfeited(27,377)88.98 
Non-vested at December 31, 2020
421,164 $102.07 
(1)The weighted-average grant date fair value of PSUs granted during the years ended December 31, 2020, 2019 and 2018 was $102.96, $101.33 and $73.74, respectively.
(2)During the year ended December 31, 2020, the attainment on PSUs vested at December 31, 2019 was adjusted to reflect actual performance.
(3)The aggregate fair value of PSUs that vested during the years ended December 31, 2020, 2019 and 2018 was $24 million, $18 million and $13 million, respectively.
    Equity Awards Granted by Seller of CDW UK
As part of the Company's acquisition of CDW UK in 2015, stock options were granted by one of the sellers of CDW UK to certain CDW UK coworkers. In 2020, there were no outstanding option awards granted by this seller. In 2019 and 2018, 110,978 and 456,613 stock options, respectively, vested and were exercised. The activity was reported as a financing activity in the Consolidated Statement of Cash Flows and as increases to Accumulated Deficit in the Consolidated Statement of Stockholders' Equity for the years ended December 31, 2019 and 2018.